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Mergers and Acquisitions
Immigration Consequences for Mergers and Acquisitions
Employers often overlook the immigration-related considerations during the due diligence process involved in various corporate restructurings. However, mergers and acquisitions can have a substantial impact on a company’s foreign workforce, including putting the employees out of status – thereby exposing them to removal and other harsh immigration consequences – and stopping the employees work authorization – thereby exposing the employer to financial and other sanctions from the government and loss of goodwill with clients. Because of the broad implications, it is important for a foreign worker and her employer to discuss the immigration consequences of any corporate restructuring with an experienced immigration attorney.
The immigration impacts of mergers and acquisitions are highly dependent on the different immigration categories of the employees involved – both for temporary (nonimmigrant) and permanent (immigrant) foreign workers.
Most nonimmigrant visas (H-1B, L-1, TN, etc.) are company-specific, meaning that the employee is only authorized to work for the petitioning company. When the company ownership structure changes, the sponsoring company may need to take other action for foreign workers to retain their work authorization.
For immigration purposes, a common concept for mergers, acquisitions, and other corporate restructuring is “successor in interest.” Most, but not all, nonimmigrant work visas are still available if the new entity can establish that it is a successor in interest to the prior sponsoring company.
For example, for H-1B workers, if the new entity qualifies as a successor in interest to the prior sponsoring company, then the new entity does not need to file a new H-1B petition – but only if it first agrees to assume the interests and obligations of the prior sponsor. However, even in this situation, the new entity must still update the H-1B public access file documents prior to closing the deal.
Again, the concept of successor in interest is typically the crux of the analysis when there is a corporate restructuring. However, the impact of a merger or acquisition generally depends on the individual employee’s place in the immigration process. Depending on where the employee is in the process (labor certification in process, Form I-140 approved, green card application pending adjudication, etc.), the new entity may need to start the process all over from the beginning or only minor updates to the immigration authorities may be needed.
Hire a Skilled Law Firm
With every corporate restructuring, it is important for the employer of foreign workers to add immigration assessments to every due diligence checklist before closing the deal. As briefly discussed above, the timing and details of the restructuring can have a substantial impact on the employer and each of its foreign employees. Our team of experienced immigration attorneys can meet with you in a variety of locations and if you’re located far away from our local offices, you can always contact us by phone or email. The team at Sam Shihab & Associates is available to answer all your questions and discuss all the legal options regarding any immigration-related issues.